Bank of Dallas v. Republic National Bank of Dallas

540 S.W.2d 499 (1976)

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Bank of Dallas v. Republic National Bank of Dallas

Texas Court of Civil Appeals
540 S.W.2d 499 (1976)

SC

Facts

Patricia Fewell established an irrevocable spendthrift trust for her own benefit and for the benefit of her children. The trust provided for reasonable support to Fewell during her lifetime in the form of income distributions in an amount left to the trustee’s discretion. The trust also provided that upon Fewell’s death, the remaining trust corpus should be distributed as appointed by Fewell in her will. In other words, the trust gave Fewell the power of appointment over the remaining trust corpus. A creditor of Fewell sought to garnish the corpus of the trust as well as the income distributed to Fewell. The trustee contended that the spendthrift nature of the trust prohibited such garnishment. The trial court held that the creditors could not garnish the trust corpus, but could garnish the trust income distributed to Fewell during her life. The creditor appealed.

Rule of Law

Issue

Holding and Reasoning (McDonald, J.)

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